Target setting for evolutionary and revolutionary process change

Abstract

Considers the relationship between the types of targets or benchmarks used and reward structures adopted in two contrasting performance improvement strategies ± continuous improvement and radical change. Hypothesises that the process of target setting and the reward structures adopted will be different between the two strategies. The propositions are that organisations involved in continuous improvement of a process will base their performance targets on past performance and internal benchmarking, arrived at through consultation and with a mixture of financial and non-financial rewards for achieving targets. For processes involving radical change, targets will be based on external benchmarks imposed by senior management, with financial rewards for their achievement. The findings from a semi-structured questionnaire conducted in 40 UK service organisations reveal that most continuous improvement targets were based on past performance and that processes undergoing radical change made limited use of external benchmarks. In the majority of cases, targets were imposed by managers without consultation, with rewards linked to the achievement of those targets. Financial rewards, particularly financial bonuses, predominated in both improvement strategies. The implications are that the potential benefits of adopting process changes are being constrained. In continuous improvement the lack of participation in target setting could be undermining the team-based empowerment philosophy of the strategy. The aim of radical change is to achieve a paradigm shift involving revolutionary rather than evolutionary change which is less likely to be fulfilled with targets based on past performance.

Examining process management via the lens of exploitation and exploration: Reconceptualization and scale development

“…Newly-created measurement item motivated by Johnston et al (2001) RPI7 Our senior management encourages "thinking out of the box". Newly-created measurement item motivated by Olson and Savory (1999) and Sutcliffe et al (2000) RPI8 We define our process performance targets by benchmarking against industry norms.…”

“…Newly-created measurement item motivated by Johnston et al (2001), Kettinger and Grover (1995), Romanelli and Tushman (1994) and Weick and Quinn (1999) IPI2 We encourage front-line employees to participate in process improvement teams.…”

“…Newly-created measurement item motivated by Johnston et al (2001) and Stoddard and Jarvenpaa (1995) IPI3 We seek ways to simplify existing processes.…”

Development and validation of business process reengineering (BPR) variables: a survey research in Slovenian companies

“…They differ in the approach: evolutionary (continuous, incremental improvement) process change in the case of TQM, and revolutionary (radical, step-change improvement) process change in the case of BPR (Venkatraman 1994, Slack et al 2001). Furthermore, Johnston et al (2001) examined and discussed seven key differences between continuous and radical process improvement, including process changes, expected improvement, benefits attained (long-/short-term), change initiator, senior management time/effort, business risk, capital expenditure and use of informational technology.…”

Avaliação do potencial de melhoria dos processos de empresas de transporte rodoviário urbano: estudo de caso em três empresas de Porto Alegre – RS

“…Diversas opções teóricas, técnicas e ferramentas, casos e aplicações, cujos princípios convergem para a idéia central de eliminação de perdas e melhoria dos processos das organizações, estão disponíveis na literatura Ballard, 2003;Cerra e Bonadio, 2000;Cunningham et al, 2000;Cypriani e Guedes, 2002;Fullerton et al, 2003;Henderson e Larco, 2002;Johnston et al, 2001;Nilsson et al, 2003;Sánchez e Pérez, 2001;Kaynak, 2003. Segundo Borchardt (2005 2.…”